logo-loader

Broker Roundup: Standard Chartered, News Corp-BSkyB, Meggitt, Cairn Energy, DDD Group, ReNeuron, Minera IRL, Mariana, Bezant & More

Published: 12:31 03 Mar 2011 EST

no_picture_pai

Raul Sinha, analyst at Nomura, thinks it's time to stop selling Standard Chartered (LON:STAN). The analyst upgraded the Asia focused banking group from ‘reduce’ to ‘neutral’ after the company promised ‘double-digit’ revenue growth in 2011.

“In the near term, we see Standard Chartered shares as being relatively supported, especially compared with HSBC, where consensus estimates have further downside potential, in our view,” Sinha said. 

Fellow Nomura analyst Matthew Walker reckons News Corp (NASDAQ:NWS) has pressed so hard to buy BSkyB (LON:BSY), it is unlikely to walk-away unless the price is ‘very unreasonable.’ The analyst, who rates Sky as a ‘buy’ with a 1060 pence target, highlighted unsubstantiated reports that News Corp would be prepared to sell-off the Sky News unit to satisfy competition regulators.

“We think News Corp could also make the transaction accretive even at relatively high prices, even though this is not the main reason for wanting to carry out the transaction,” Walker said in a note to clients.

Citi Group analyst Jeremy Bragg emphasised that Meggitt’s (LON:MGGT) financial results showed positive momentum into 2011, with earnings coming in ahead of consensus expectation due to stronger margins and lower taxes. Bragg said: “we see scope for further modest consensus EPS momentum.” The analyst reiterated a ‘buy’ rating with a 425 pence target.

Melanie Savage at UBS highlighted growing confidence that Cairn Energy (LON:CNE) will complete its deal to divest some of its Indian unit to Vedanta (LON:VED), she also identified upcoming drilling in Greenland as a share price catalyst. “We believe the market may pre-empt the announcement of Greenland prospect sizes in May and as a result the shares may trade higher on what we view as a momentum trade,” Savage said.

Arbuthnot analyst Dougie Youngson upheld the ‘buy’ recommendation and 392 pence target on Soco International (LON:SIA) after it completed four wells in Vietnam, and confirmed its reservoir model assumptions along the way. But said that once production is on-stream from the field he reckons its due a re-rating.

“This project is Soco's first major production asset and represents a significant change in its strategy and future financial direction,” Youngson said.

Brewin Dolphin’s Greig Aitken thinks DDD Group’s (LON:DDD) development deal with Texas Instruments (NYSE:TXN) may generate revenues as soon as early 2012. The broker said that given the huge scale of the mobile industry and TI’s position within this industry, a successful collaboration with this company could have significant valuation upside.

Aitken rates DDD as a ‘buy’ with a 37 pence target.

Panmure analyst Savvas Neophytou said the fact that Renovo (LON:RNVO) will not undertake any further clinical development of Juvista is a welcome development. Neophytou rates Renovo as a ‘buy’ with a 30 pence target - twice as much as the current price of 15 pence. 

“We applaud management’s decision to conduct a strategic review so promptly. We continue to believe that the company’s residual value is closer to 21 pence as a wind-up, and could be as high as 30 pence in a trade sale situation.”

Meanwhile Nomura’s Samir Devani reckons its worth 17 pence a share. He has a ‘neutral’ rating for the biotech junior.

Vadim Alexandre at Daniel Stewart & Co reiterated a ‘buy’ recommendation on ReNeuron (LON:RENE) after it revealed a positive news from its groundbreaking PISCES clinical trial into the ReN001 stem cell treatment in disabled stroke patients.

The analyst’s 13 pence a share target implies 128 percent upside from the current price of 5.8 pence.

finnCap Analyst Joe Lunn looked at two South American focused gold companies Mariana Resources (LON:MARL) and Minera IRL (LON:MIRL), both of which had drill results out today.

Regarding Mariana Lunn reckons the assays from the Las Calandrias tenements in Patagonia are encouraging, but more drilling is need to increase confidence.  “Achievement of our 64 pence per share valuation depends on further exploration success at Las Calandrias,” Lunn said.

Looking at Minera - whose shares hit an all time high today - He expects the shares to strengthen as a speculative valuation (that he puts at 16 pence a share) is priced in. Overall Lunn gives Minera IRL a ‘sum-of-the-parts’ 117 pence a share valuation.

Meanwhile also focusing on Minera IRL, Fairfax Securities mining guru John Meyer said: “These are encouraging results for the company and could delineate another project to pursue and develop, bolstering the company’s portfolio of targets.”  

The respected mining analyst highlighted that Oxus Gold (LON:OXS) may still have some valued although its hands are currently tied by its dispute in Uzbekistan.

“Oxus Gold is now a litigation company,” Meyer said.

“Investors may gain compensation for the losses incurred in time and the business may then have value as a shell company.  We feel there are quite a number of opportunities for management to pursue outside Uzbekistan but that their hands may be tide till settlement is reached with the Uzbekistan government.”

Meyer also had some positive comments on Ncondezi’s (LON:NCCL) flagship asset in Mozambique, it should benefit from considerable development activities taking place in the region. He added: “We are also bullish on the coal space generally with growing demand and difficulties for the supply side to meet this, as India and China push to secure supplies from around the world pushing up prices.”

Singer Capital’s Charlie Lon highlighted Bezant Resources (LON:BZT) and Golden Prospect Precious Metals (LON:GPM), drawing investors’ attention to the opportunities offered by these two companies in the metals sector.

Long estimated Bezant’s net asset value at £75 million, about 122 pence per share, ith the flagship Mankayan copper-gold project valued at US$177 million. Meanwhile he believes if exploration is successful at the Eureka project will it will be a ‘relatively straight forward’ project to take to production (with a modest capital cost of US$25 million).

Meanwhile Long emphasised that GPM has been the top fund in the gold sector since New City Investment Managers took the reins. Since then it has outperformed the top gold and precious metals mutual funds by very significant margins, Long said. 

He adds: “For UK investors seeking exposure to gold equities Golden Prospect provides access to a global gold mining universe, a very successful investment strategy and superb performance.”

 

Australian Strategic Materials signs US$600 million LoI

Rowena Smith, CEO and managing director of Australian Strategic Materials Ltd (ASX:ASM, OTC:ASMMF), joins Jonathan Jackson in the Proactive studio to discuss the company’ s Dubbo Project, in Central West New South Wales. This project aims to extract and process critical minerals and rare earth...

4 hours, 10 minutes ago